Cases In Financial management Flashcards
0
Q
Costs of iPod
A
Leave money on the table
Investment banks underprice to avoid being stuck with a bunch of overpriced securities. This also protects their clients from buying an overpriced security
1
Q
Benefits of iPod
A
Exit strategy for original investors
Liquidity
Marketing
2
Q
Stock repurchase
A
Increases EPS bc there are fewer shares in circulation
Good for CEOs who are compensated with stock
Typically signals undervaluation bc management has more info than outsiders
